Two Democratic U.S. senators on Thursday formally requested that Wall Street’s primary regulator and a Defense Department watchdog take steps to prevent and investigate what they describe as potentially improper trading by government insiders tied to presidential announcements.
In a letter to the heads of the Securities and Exchange Commission and the Defense Department’s Inspector General, Senators Mark Warner of Virginia and Adam Schiff of California said recent reporting has documented major moves across equities, commodities and prediction markets over the last year that are consistent with the possibility that traders possessed advance knowledge of presidential announcements. The reporting cited examples including statements linked to the war with Iran, tariff actions and the capture of Venezuelan leader Nicolas Maduro.
The senators warned that such patterns raise concerns that federal officials could be disclosing material non-public information for private financial gain. In their letter they wrote:
"Recent reports of equity trading that occurred shortly before significant government policy announcements suggest that federal officials are disclosing material non-public information for financial gain,"
and added:
"These actions undermine public interest and market integrity, and demand oversight by each of your respective authorities, as well as by Congress."
Warner is the top Democrat on the Senate’s Select Committee on Intelligence. The letter asks for investigation and preventive measures within the remit of the SEC and the Defense Department’s Inspector General.
Officials have offered limited public response so far. An SEC spokesperson declined to comment, and the Defense Department Inspector General’s office did not immediately reply to inquiries. The White House has denied any wrongdoing connected to the trading patterns.
Observers and market participants have noted the overlap between market moves and policy announcements, but the senators’ letter focuses on the need for formal oversight and investigative action by the agencies addressed. The correspondence seeks to ensure that market participants and the public can have confidence in the integrity of markets where equities, commodities and prediction instruments are traded.